Equinor shares slide on weaker-than-expected cash flow

(Sharecast News) - Equinor shares fell sharply on Wednesday after weaker-than-expected cash flow overshadowed record production and its strongest quarterly profit in three years, as the Norwegian oil group benefited from surging energy prices linked to the Iran war.

Adjusted earnings before tax rose to $9.77bn in the first quarter from $8.65bn a year earlier, beating the $9.0bn expected in an Equinor-compiled analyst poll cited by Reuters.

Adjusted operating income after tax rose to $2.86bn, ahead of the $2.6bn average analyst estimate.

The results were supported by higher oil and gas prices after the US-Israeli war with Iran disrupted energy flows from the Persian Gulf.

Brent crude had risen above $100 a barrel since the conflict began, while European gas prices also climbed as Qatari liquefied natural gas shipments were disrupted.

Equinor produced a record 2.31 million barrels of oil equivalent per day in the quarter, up from 2.12 million a year earlier and ahead of analyst expectations of 2.22 million.

The company had avoided the production disruptions faced by some peers because it has no direct asset exposure in the Middle East.

Cash flow from operations after tax fell 19% to just over $6.0bn, however, missing forecasts of $7.3bn to $7.5bn.

Equinor said the shortfall was partly caused by higher collateral requirements for energy trading amid volatile markets.

Chief executive Anders Opedal said disruption to global energy flows was likely to persist beyond any end to the conflict.

"If this stops now, we think there at least will be around six months plus before everything is back to normal," he told Reuters.

Equinor's downstream division, which includes energy trading, reported profit of $787m, ahead of analyst expectations of $693m and above the unit's long-term quarterly guidance of $400m.

Despite the prospect of windfall gains from higher prices, Equinor kept its regular quarterly dividend unchanged at $0.39 per share and reiterated its previously announced plan to cut share buybacks by 70% this year to preserve cash.

The company said it would start a second tranche of its buyback programme worth up to $375m, within its 2026 plan to repurchase as much as $1.5bn of shares, down from $5bn in 2025.

Opedal said cash flow could increase by as much as $8bn this year, but added that it was too early to decide whether to raise buybacks or announce special dividends because of continued price volatility.

Equinor is due to present a strategy update next month and may revisit capital distributions later in the year.

At 1138 CEST (1038 BST), shares in Equinor were down 8.46% in Oslo at NOK 350.90.

Reporting by Josh White for Sharecast.com.